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Targeting Of U.S. Agricultural Export Subsidies: A Theoretical Analysis

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  • Haley, Stephen L.

Abstract

The United States has proposed that all direct and most indirect agricultural export subsidies be eliminated by the year 2000. Prospects for success depend on major agricultural exporters reaching a consensus that elimination of the subsidies would be mutually beneficial. This report illustrates a methodology that can be refined to show whether the United States has the power to influence other exporters, especially the European Community (EC). It is assumed that the United States seeks a consensus based on U.S. capacity to threaten to use targeted export subsidies to disrupt world wheat and corn markets to its own benefit. Preliminary results indicate that there are potentially large gains to a targeted subsidy program for wheat but probably not for corn. The marginal gain to a program involving more than $2.5 billion is likely to be small. If the EC decides to target its wheat subsidies in response to the U.S. program, it can more than offset the losses due to the U.S. program.

Suggested Citation

  • Haley, Stephen L., 1988. "Targeting Of U.S. Agricultural Export Subsidies: A Theoretical Analysis," Staff Reports 278018, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278018
    DOI: 10.22004/ag.econ.278018
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    File URL: https://ageconsearch.umn.edu/record/278018/files/ers-report-344.pdf
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    References listed on IDEAS

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    1. Philip C. Abbott & Philip L. Paarlberg & Jerry A. Sharples, 1987. "Targeted Agricultural Export Subsidies and Social Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(4), pages 723-732.
    2. Gardiner, Walter H. & Dixit, Praveen M, 1987. "Price Elasticity of Export Demand: Concepts and Estimates," Foreign Agricultural Economic Report (FAER) 305286, United States Department of Agriculture, Economic Research Service.
    3. Sharples, Jerry A., 1984. "The Economics of Targeted Export Subsidies," 1984 Annual Meeting, August 5-8, Ithaca, New York 279071, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Roningen, Vernon & Sullivan, John & Wainio, John, 1987. "The Impact of the Removal of Support to Agriculture in Developed Countries," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 269904, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Sharples, Jerry A. & Dixit, Praveen M., 1988. "Forces that Could Expand U.S. Wheat Exports: Estimates From a World Wheat Trade Model," Staff Reports 277990, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Liapis, Peter S., 1989. "Estimation and Evaluation of Economic Community Wheat Export Subsidies," Staff Reports 278253, United States Department of Agriculture, Economic Research Service.

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